Pretty much the same failure mode, just with different immediacy. No more travel, no more ability to start using new banking services, no more proving identity for becoming employed, pretty much anything that needs you to provide valid governmental ID (ID card or passport) and doesn't accept alternatives.

On the opposite end of that, both those services might accept something like a driver's license and the banking service might allow you to log in with their app, or a similar identity provider as a backup.

> There’s zero need for the government to mediate between me and my bank, or some random service provider on the internet.

Who else should we depend upon for verifying the identity of someone? Because currently it's a hodgepodge, especially when some places treat the equivalent of an SSN as a secret or have other half baked mechanisms, whereas in actuality it's a problem that's been solved far better, the same way how e-signatures work here when a single competent authority implements them well (certs on the e-ID card, you choose what to sign, but there's both data integrity and non-repudiation, a service that everyone integrates with and it is basically treated as a commonplace utility).

> What you’re describing sounds like a fun technical challenge assuming a perfect world. ...

Yeah, that's about it. Have a good one!